Day Trading Chat Room Catching All Of This Rally – Take the 1 Week Free Trial

December 9, 2016
Author: Peter Stolcers, Founder of OneOption

TAKE THE 1 WEEK FREE TRIAL AND CATCH THIS RALLY Posted 9:30 AM ET - On a day trading and swing trading basis, buy dips. I know it's hard to chase stocks when they have run hard, but this is the breakout we have been waiting for. The longer and tighter the range, the bigger and more sustained the breakout. The market has not advanced in 18 months and there is a lot of money on the sidelines. Two weeks ago I mentioned that we were seeing rotation into basic materials and out of technology. That was a bit concerning because it was a sign that new money was not coming into the market. In the last few days we have seen oil move higher and technology is catching a bid. These stocks have not participated in the last leg of this rally and they will play catch-up. New money is coming into the market now and that is bullish. China has been tightening money supply for well over a month and inflation is starting to surface. Their PPI was up 3.3% and this will put upward pressure on global interest rates. Next week the Fed will tighten. They don't want to alarm investors during the transfer of power so they are likely to point to the back half of 2017 for the next rate hike. If economic conditions strengthen, they can always move that timeline forward. At this particular juncture, they will soften the rate hike with dovish rhetoric. The market reaction would normally be bullish, but after a big market rally it will likely be neutral. I am trading from the long side and I will wait for stocks to stabilize before I start scaling in. After a big run, it is likely that sellers will probe for support early in the day. I want to make sure that that support holds before I start buying. As long as you have a market tailwind, let your stocks tick higher (ride the wave). When we were trapped in the trading range I advised you to set passive targets. That is no longer the case. If the market makes a big run like it did yesterday and the advances stall, take profits. Know that bullish speculators are piling in and they can easily be shaken out. I saw the reversal Thursday afternoon from a mile away. I exited all of my long positions and I shorted the S&P futures for a four-point gain. Stocks are getting a little over-extended and the "fluff" can be taken out at any time during the day. I like buying stocks that have fantastic relative strength and that have pulled back from their high of the day. Once support is established I enter the trade. When the stock gets back to its high of the day I watch very closely. If it can't get through resistance I take profits. If it breaks out, I let it run. Look for opportunities to get long. Dips will be brief and short. In particular, I like tech. These stocks have lots of upside. Don't chase stocks. You'll have lots of opportunities to get long. If you jump the gun, you will be vulnerable and you could take heat on your positions. Because the overall market is heading higher, you will be able to scratch the trade. However, if you are patient you will be rewarded. Wait until the stock pulls back and be ready to buy when it rallies off of support. You will make money in this scenario versus the other scenario where you are praying that the stock recovers. If you are a day trader, you should check out my chat room. Take the one-week free trial and watch us make money every day. . . image

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